May 16, 2017
For those about to embark on a home purchase and it’s their
first time, they really don’t appreciate how easy the approval process is
compared to several years ago before automated underwriting took over. In the
past, a loan was completely documented before an underwriter ever looked at the
loan file. A fully documented loan package could be two to three inches thick!
Today, that process is streamline and applicants only submit the items listed
on the automated approval. Today, loans are “approved” first, and then
documented afterward. Here’s how to get approved for a home loan in today’s
Credit. When you
first submit a loan application, the lender submits your electronic application
through an automated system which also pulls a credit report and credit scores.
Most loan programs require a minimum credit score of 620 although there are
other instances where lower scores are accepted. Lenders also ask there be at
least three trade lines on the credit report in good standing.
are required to verify a borrower’s ability to repay the mortgage along with
any other outstanding credit obligations and do so by reviewing copies of your
recent pay check stubs and W2 forms from the previous two years. Lenders ask
you have at least two years of employment in order to qualify. As it relates to
current debt, lenders will add your minimum monthly credit obligations together
along with your new house payment and compare that amount to your gross monthly
income. Your debts should be somewhere around 40 percent of gross income or
need some funds for a down payment and closing costs and your lender will
verify you have funds available to you for this purpose. Be prepared to provide
copies of your most recent bank and investment statements showing sufficient
funds to close.
In today’s mortgage world, there’s no need to wonder if
you’re going to get approved or not. All you need to do is to speak with a loan
officer who will ask a series of questions and then suggest a loan program for
you based upon your answers. By submitting an online loan application at the
outset, before you ever even start looking for a property, you’ll know exactly
what you need to provide and when. That way you can shop without wondering if
you’re going to get a loan approval or not.
For more information or questions about mortgage loans, please call (855) 757-8748.